Down and Out in Cairo (Ill.)

I came across this house by happenstance. My great-aunt passed away a few weeks ago; she was 94. She had requested cremation and that I drive her cremains from her home in South Louisiana to a cemetery in northern Indiana, where she wanted to rest next to her second husband. I’d just crossed the Mississippi River into Illinois from Missouri when I saw the exit for Cairo. Having had way too much iced-tea starting back in Memphis, the time had arrived for a pit stop.

I was not prepared for Cairo.

I’ve seen my share of desolation and poverty in the world – the slums of northeastern India, deep in Romania’s Western Mountains, all over Cambodia and Burma, and across various stretches of Nicaragua, Thailand, Kazakhstan, Colombia and Ghana. I’ve seen it, too, in parts of Detroit, here at home.

But driving through Cairo felt strangely different.

The Tortured March of Technology

Passing through the Canadian National railway tunnel, built in Cairo’s heyday in the first few years of the 1900s, felt like passing through a portal to some place almost fictional. Maybe I’d arrived on the set of The Walking Dead. Save for a Subway and the Nu Diner, about every shop was vacant and clearly had been for a while. The town is eerily silent. The Census claims about 2,800 people live here. Probably right; seems high, though, given that I didn’t see more than a dozen people. Fewer than that number of cars passed me on Highway 51, the main drag through town.

The house in the picture is one of many – many – in a similar state of disrepair. I found one or more like it on just about every street it seems. Certainly, that’s hyperbole; I’m sure there were some streets, mainly in the historic Park District, without such homes. Historic downtown is a ghost town. Burned out buildings. Shattered and boarded windows. The Gem Theater hasn’t shown a movie in nearly four decades.

I’m not belittling or mocking or insulting Cairo or it’s people. In fact, I have an odd sense of affection for the place; I’d like to return. The romantic in me longs to restore one of the architecturally gorgeous early-1900s homes in desperate need of a face-lift. Of course, I know I’d never recoup the investment in a town that’s dying.

Still, I have to point to make: Cairo is a cautionary tale for what’s befalling America today. I wouldn’t be surprised if my son or daughter wrote a similar piece as this a few decades from now lamenting the dying towns they stumble upon.

Because I was so fascinated by the depths of the despair I saw here, I hit up Uncle Google to tell me all he could about Cairo…

Clearly, Cairo is it’s own worst enemy. A series of race riots here in the 1960s and 70s resulted in long-running boycotts of white-owned business. That crippled what economy existed and set the town on its path to irrelevance. But, turns out, technology played a defining role, too. And in that history we find a preview of America writ large over the coming years.

Odd but (supposedly) true facts:

Cairo’s post office was once the third-busiest in America at the height of the city’s boom phase. I’m taking you back well over 100 years. Still, a fairly amazing fact for a town that never rose much above 15,000 residents.

At one point, some folks pushed to relocate America’s capitol to Cairo from D.C.

The reason for these oddities stems from Cairo’s geography – a peninsula wedged between the Mississippi and Ohio rivers. In his early days as a general in the Union Army, Ulysses S. Grant set his headquarters in Cairo to supply and train the Union soldiers that battled Rebel forces in the Deep South, establishing Cairo’s bona fides. Before and, especially, after the war, the town’s geography served it well as a port city for steamboats and ferries toting goods and people up and down the two rivers. Congress even bequeathed the town with Port of Delivery designation, meaning commercial goods traveling the rivers made port here for inland delivery across the region.

Railroads – a technological leap in their early days – began to kill the ferries.

River barges – a technology that allowed more goods to travel the waterways – killed the steamboats, which could not ferry as much product. Cairo’s fortunes declined further as the need to pull into port vanished.

Highway bridges – a type of roadway technology – soon traversed the twin rivers in multiple locations, finishing the ferries for good and shriveling demand for rail traffic. The bridges also allowed road traffic to bypass Cairo, depriving the town of commerce.

Throw in a famous lynching and the race riots and, well, you have a cautionary tale…

Mass Job Extinction

We’re now in the early stages of a radical lurch into the next industrial epoch as “machine learning” and artificial intelligence infiltrate the economy.

Cairo’s decline stretched over several decades and took place at a time when technological advancement moved at what we today consider a subdued pace. AI and machine learning, by comparison, move at a blinding pace. Consider that only 10 years ago the iPhone arrived, and look at all the products or industries it has destroyed or severely upended in its short lifespan: pay phones, video recorders, traditional cameras, voice recorders, the music industry, GPS locators, maps, the retail industry, newspapers and news itself, computers, television and TV programming, Hollywood and how we consume movies, taxis, the hotel and travel industry, mobile phone carriers. I’ll stop there, but the list goes on for a while.

And think of the jobs iPhone’s technology (and Internet technology, in general) displaced: Pay-phone workers, retail clerks and owners of camera, video, movie-rental and music stores. Reporters at newspapers and magazines, and videographers at TV stations. Taxi drivers. Again, the list is long.

That list will only grow.

AI and machine learning will replace scores and scores of jobs in blue- and white-collar fields. Few people are safe. Technology already beats radiologists as spotting potentially cancerous growths in breast tissue. Self-driving cars will replace all taxi (and Uber/Lyft) drivers. Robotics will replace the hotel desk clerk and concierge. Robotics and self-driving cars will replace the cop on the street and firefighters … and garbage-truck drivers and delivery drivers.

At the lower end of the job spectrum, where tasks are repetitive or low skill, the carnage will be far, far worse.

I was in L.A. in early 2015 meeting with a company that designs iPad-like devices consumers increasingly use to order meals at restaurants … and I stopped into a restaurant using that technology. The only staff members were a couple of cooks in the back and a hostess whose job was helping customers understand the self-serve process. Once the masses are accustomed to that, of course, no need for the hostess anymore. No more wait staff, no counter staff, no one to process your payment or bus your table.

The cooks are toast, too, at some point.

Later this year, a Bay Area outfit plans to open a burger joint in which a machine will cook and deliver your burger, in whatever fashion you order it. The company has perfected this burger-making machine and it’s not hard to imagine all fast-food outlets will ultimately gravitate to this or similar technology. Why hire humans when a piece of coding or a “smart” machine can do the same work with far greater efficiency, at far less cost, and no HR headaches?

The big conundrum is this: Where do all the displaced workers go?

I know the theory: Every job technology kills, it replaces with other opportunities.

Maybe.

Then again…

The Die Is Cast at This Point

Technology is getting so good that it’s designing its own technology without human intervention. And given how efficient technology is, the new jobs created in the future will likely demand far fewer workers. A single 20-something with a laptop and a high-speed wi-fi connection will manage a franchise of fast-food outlets across an entire city or a small region. Drones will deliver packages, and those drones will take direction from GPS-aware software and apps. Maybe a human is in the mix. Maybe not. If so, though, it won’t be amid a cubicle-farm of humans, for sure.

At some point, technology will have displaced so many humans that we risk scads of American towns and cities beginning to look like Cairo.

Aside from investing in certain stocks to profit from what’s coming, there’s not a lot any of us can do about this. We cannot go back to a pre-Internet, pre-iPhone existence. We can’t un-see and un-know all that we’ve come see and know and rely on in this modern life. We can only march forward, for better or worse.

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About Author

Jeff Opdyke

Globally focused investment analyst who has traveled to more than 60 countries to put geo-political and geo-economic events into an investment perspective. I consult to asset- and wealth-management firm 1291 Group of the America. And, since my 9/11 experience, I worry that America is moving in the wrong direction...